DBR and ERP

MRP

The Drum Buffer Rope DBR approach is a management philosophy for manufacturing companies. It was developed by Dr. E. M. Goldratt. The DBR premise is that organizations exist to achieve a goal. Using the DBR philosophy enables the managers to optimize decisions to achieve the goal. If, for example, the goal of a business is to make money now and in the future, it is suggested that DBR will enable the managers of the company to do so. A factor that limits a company’s ability to achieve more of its goal is referred to as a "constraint."

Businesses need to identify and manage constraints. It may be relatively easy intellectually to recognize that an organization must have a constraint, but it may be a challenge to precisely identify the constraints. In situations when the constraint can be easily identified, the five steps Process of On-Going Improvement provides the steps necessary to deal with the constraint. In situations when the constraint is not as easily identified, the Thinking Processes provides the tools necessary to identify the core problem or core conflict and the tools needed to deal with it effectively.

The Process of On-Going Improvement and the Thinking Processes are summarized below. DBR, then, is a management philosophy that focuses the organizations scarce resources on improving the performance of the true constraint, and therefore the bottom line of the organization. Goldratt uses a chain analogy to help illustrate why this is an effective way to get immediate results. A manufacturing company can be thought of as a chain of dependent events that are linked together like a chain. The activities that go on in one "link" are dependent upon the activities that occur in the preceding "link." DBR says that management needs to find the weak link in the chain since "a chain is only as strong as its weakest link." Thus, a company should focus on "chain strength" (not link weight) by working to strengthen the weakest link, the constraint! This is the concept of the Critical Chain.

DBR provides a process to identify, prioritize and eliminate constraints. DBR was initially applied to solve problems of bottlenecks, scheduling, and inventory reduction. DBR defines three operational measurements to base improvements on:

• Throughput: The rate at which the system generates money through sales i.e. Contribution Margin

• Inventory: All the money the system invests in things it intends to (or could) sell.

• Operating Expense: All the money the system spends in turning Inventory into Throughput.

DBR Production Scheduling

Drum-Buffer-Rope (DBR) is a unique production scheduling system. DBR improves on Just-In-Time by taking into account variability and uncertainty (problems, disruptions) in addition to planned, dependent events, thereby achieving even better on-schedule performance. DBR exploits systems constraints and employs the careful and calculated use of time buffers. Buffers allow the operation to run at near minimum theoretical flow, while simultaneously protecting delivery schedule.

Seradex ERP Production Scheduling Software
incorporates DBR functionality to enable manufacturing companies to rapidly implement DBR. This approach offers significant improvements in throughput or turn-around time at reduced lead time, inventory and cost.

Besides the excellent functionality in Seradex ERP software there are many organizational skills that also need to be developed. These include Critical Chain Project Management, Drum-Buffer-Rope Production Scheduling, Distribution and Replenishment, Strategic Planning, and Thinking Processes (TP). Seradex has proven implementation services to help you deal with these issues.